Innovation and Development: The Politics at the Bottom of the Pyramid

By Mario Pansera and Richard Owen

Innovation, often tempered by the language of inclusion, has become an indispensable element of contemporary development policy and practice in the so-called Global South. Driven by multinational companies, public–private partnerships and social enterprises, “innovation for development” aims to co-produce social goods (things of value) such as poverty alleviation with associated profit through innovative market-led solutions, opening up untapped and unserved markets in the developing world and exploiting the potential “fortune at the bottom of the pyramid”. But innovation for development is a contested notion with the capacity to shelter multiple political agendas.

By reviewing existing academic theory and discussing four in-depth case studies from Bangladesh and India, this book interrogates how innovation for development is being framed, its politics and the impacts it is having on rural communities on the ground. The analysis suggests both an emerging hegemony constructed around a neoliberal, market-led agenda and the existence of countervailing voices that question this framing, sometimes radically so.

• Language: English
• Publisher: Wiley
• Release date: Nov 26, 2018
• ISBN: 9781119572589

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Preface

Recent decades have witnessed a growing cross-fertilization and infiltration of the language of innovation into the lexicon of development. Indeed, innovation has grown to become a seemingly indispensable element of development policy and practice in the 21st Century (Johnson and Andersen 2012; OECD 2012; OECD 2015; Utz and Dahlman 2007; World Bank 2013). This book describes and critically interrogates this cross-fertilization. Based on our own research and the scholarship of others, we explore how innovation for development is being framed and how it is impacting life in the so-called Global South.

The Western project of development began in earnest after World War II. But since then, it has witnessed a progressive shift in emphasis and delivery. A macroeconomic focus based largely on donor-led, institution building initiatives, often involving state-funded finance and technology transfer from North to South, gave way to a more granular approach directed at local interventions (Escobar 2012; Rist 2011), often involving a wider range of funding sources (e.g. private foundations and companies) and stakeholders (e.g. non-governmental organizations (NGOs), local communities and social enterprises).

The rise of the Western neoliberal agenda in the 1980s was an important moment, promoting the idea that development should be a spontaneous phenomenon that occurs best when the endogenous, productive forces of society are free to act. The so-called Washington Consensus imposed a policy of structural adjustment, with the liberalization of trade, removal of tariff barriers and privatization of several sectors of national economies. Catalyzed by Western nations (notably the USA and in Europe) and multilateral institutions such as the International Monetary Fund (IMF), World Bank and World Trade Organization (WTO), the neoliberal turn radically changed the way that development interventions were framed and delivered. It opened the door for business and management scholars to treat development as a legitimate object of study. Ideas of technology transfer from the developed to the developing world had been a feature of the development discourse since World War II, famously embodied in the inaugural address on January 20, 1949 of president Harry Truman of the United States and his proclamation to make available to peace-loving peoples the benefits of our store of technical knowledge in order to help them realize their aspirations for a better life. Ideas of intermediate and appropriate technologies had also emerged in the 1960s, in part based on the seminal work of Fritz Schumacher and inspired by the earlier ideas of those such as Mahatma Gandhi. But now the emphasis would change. Now, the emphasis would increasingly be on innovation.

Philanthro-capitalists from Silicon Valley and beyond, with an innate belief in societal progress through technological innovation, (Fejerskov 2017, p 953) also emerged as prominent actors. Interventions aimed at innovation and entrepreneurial dynamism paved the way for private foundations, corporations and synergies between these and the state to fight poverty, spur modernization and development. Inspired at least in part by what Levidow and Papaioannou (2017) describe as a liberal-individualist mindset, the poor who inhabit the Bottom of the Pyramid in the Global South (i.e. those nominally living on less than 2 US dollars a day (Prahalad 2010)) could now be positioned not as being dependent on aid, but as consumers (ibid.), entrepreneurs (London and Hart 2011) and aspirational, successful individuals (Yunus 2010). They could have agency. Previously ignored rural backwaters became promising markets with untapped potential (Smith 2002, p. 98).

The rise of innovation in the development discourse has not gone unnoticed. Indeed, the concept of innovation for development stands on deeply contested ground. This is in part because it has the capacity to shelter multiple (political, economic) agendas, from a desire to use it to open up the Fortune at the Bottom of the Pyramid for multinational companies, to foster community emancipation, to ignite social and political revolution and the redistribution of power and the means and ownership of production. These echo debates concerning technology over previous decades involving Gandhi and others. Innovation for development can be considered as an umbrella term that can be co-opted to propagate, tacitly or explicitly, particular world views, normative stances and political ideologies. Unpacking these broader dimensions and entanglements, understanding how innovation is framed and the impacts such framings of innovation have on the ground is what is of interest to us: this is the subject of our book. Inspired by understanding from the field of Science and Technology Studies (STS), we take a critical approach, drawing on our published research in the field¹ (in particular, in the Indian subcontinent) which we draw together, extend, update and critically discuss. Based on this, we describe the evolution and rising popularity of the buzzword innovation in the Global South, which we will argue is often tempered by other buzzwords such as inclusion and self-help that serve as fragile discursive bridges between the previously distant worlds of innovation and development. We explore and interrogate innovation’s politics, normative underpinnings and impacts. This analysis will lead us to conclude that the poor lie at the center of a battleground where many aspire to speak on their behalf in terms of development and the role of innovation therein. We will suggest that while innovation for development is a concept that is ambiguous, interpretively flexible and deeply contested, a potentially hegemonic, Western-inspired market-ready and market dependent framing may be emerging that is having significant impacts on rural life, culture and ways of being.

Mario PANSERA

Richard OWEN

September 2018

1 Excerpts from the following publications have been included in this book, with permissions (see the Permissions section in the references list, page 178):

Pansera and Owen (2018). Framing inclusive innovation within the discourse of development: Insights from case studies in India. Research Policy, 47, 23–34. doi: 10.1016/j.respol.2017. 09.007.

Pansera and Martinez (2017). Innovation for development and poverty reduction: An integrative literature review. Journal of Management Development, 36(1), 2–13. doi: 10.1108/JMD-02-2015-0013.

Pansera and Owen (2016). Innovation for de-growth: A case study of counter-hegemonic practices from Kerala, India. Journal Cleaner Production. doi: 10.1016/j.jclepro.2016.06.197. Pansera and Owen (2015). Framing resource-constrained innovation at the ‘bottom of the pyramid’: Insights from an ethnographic case study in rural Bangladesh. Technological Forecasting & Social Change, 92, 300–311. doi:10.1016/j.techfore.2014.10.004.

Introduction

"People need new tools to work with rather than new tools that work for them."

Tools for Conviviality (Illich 1973, p. 10)

The aspiration to transform our surroundings and to progress is often considered innate in human beings. Such urgency for change, however, acquires different forms depending on the cultural, social and political setting in which it emerges. Since the dawn of modern capitalism, modulated as it has been through competition and creative destruction (Schumpeter 1934), change in society has often been driven by technological innovation. The idea that wealth, growth and progress are generated by new (often scientific) knowledge, entrepreneurialism and innovation and that the new is always better than the old, has pervaded and become entrenched in the collective imagination of people at all levels of Western society. Science, technology and innovation are perceived as the foundations for widespread prosperity and better standards of living. Innovation, which is set within the broader construct of the knowledge economy, has become positioned as the mantra for success, driving economic growth and wealth.

This Western imaginary has also penetrated cultures far beyond the West. The capacity to innovate is now considered to be a critical factor that explains why some countries are rich and developed whereas others are backward, poor and in need of development. The mantra of innovation has become deeply entwined with the project of development. However, innovation at the periphery of the so-called developed world is different. Here, in the so-called developing world – one which is not necessarily defined by national boundaries – people rely more on informal economies and networks of subsistence. Institutions that characterize stable Western societies are fragile and sometimes non-existent. In these contexts, the features of socio-technical change evident in industrialized countries become fuzzy and elusive. As Sahlins (1992; 1993) points out, the modernizing wave of techno-capitalism does not sweep away indigenous cultures, but rather triggers unexpected pathways of change within them. This hidden process is occurring everywhere on different fronts. The vast academic field of political ecology has documented how traditional communities all over the world have opposed the process of commodification of natural resources not only through conflict, but also via a process of social and technical rearrangement (Martinez-Alier 2002). Innovation in this context hardly fits the simplistic label of a creative, managed process aimed at bringing something new to the market. Its purposes and goals are contested and subject sometimes to vociferous debate. As innovation meets development, deep questions emerge concerning why people want to change and to what ends, and what people will gain and lose.

This book focuses on the intersections between innovation and development in what are commonly defined as developing countries. In order to introduce the reader to this topic, we start by considering the last three decades or so, which have been characterized by a progressive cross-pollination between the once quite disconnected fields of development studies and business and management. A consequence of this cross-pollination has been that the theory and practice of development is no longer the domain of economists, development scholars and those involved in the funding and delivery of large, often state-funded donor projects. The ideologies of competitiveness, entrepreneurialism, the free market, business management and private–public cooperation – all underpinned by innovation – have entered triumphantly into the field of development, not only bringing with them new actors and new terms, but also re-igniting debates that run deep and go back many years.

I.1. Innovation emerges from under the radar

Until the end of the 1990s, the topic of development, once dominated by development economists, had largely gone under the radar of management, organization and innovation scholars (Kolk and Rufin 2013). There had, of course, been terms such as appropriate technology (which emerged in the 1960s) and grassroots technology movements (Smith and Thomas 2014). However, new terms now began to emerge such as resource-constrained innovation (RCI) (Agarwal and Brem 2012) and a bewildering array of intriguing and provocative concepts such as frugal innovation (Bound and Thornton 2012), reverse innovation (Govindarajan and Trimble 2012), jugaad innovation (Radjou et al. 2012), "BOP¹ innovation (Prahalad 2010; Prahalad 2012), Gandhian innovation (Prahalad and Mashelkar 2010), empathetic innovation, pro-poor vs. from-the-poor innovation (Gupta 2010a; Gupta 2012), long tail and long tailoring innovation (Anderson and Markides 2007), below-the-radar innovation (Kaplinsky 2011) and, notably, inclusive innovation (Heeks and Nugroho 2014). These began to attract the attention of a heterogeneous community of scholars around the world. These forms of innovation are characterized by conditions of material, financial and human resource scarcity (Baker and Nelson 2005; Gibbert and Valikangas 2006; Keupp and Gassmann, 2013), resource insecurity and, sometimes, concerns regarding environmental sustainability (Sharma and Iyer 2012). Their focus in general has been on emerging and developing countries, and specifically: their role in the global value chain (Kaplinsky 2000), their potential to help exploit as yet unexploited markets (Prahalad 2010), and the emergence of indigenous forms of innovation (Smith and Thomas 2014). All those perspectives agree on the fact that innovation capacity – whatever this means – should be enhanced in order to allow these countries to develop", often advocating an inclusive approach that helps to support the fair distribution of social goods.

This heterogeneous literature is focused on the resolution of (at least) three substantive questions: first, does innovation occur (and if so how) in resource-constrained environments in the so-called developing world (Keupp and Gassmann 2013)? Second, how does innovation contribute to various goals, for example, of social inclusion and poverty alleviation (George et al. 2012; Hall et al. 2012; Halme and Linna 2012), and/or the creation of markets for commercial gain? Third, what are the implications for the so-called developed world (i.e. innovation blowback or South–North innovation transfer) (Brown 2005) – acknowledging the globalization of resource scarcity as a contemporary feature of our time – and in turn what are the implications for emerging innovation policy (i.e. a focus on implications, policy and even risks (Gupta 2012))? To these we can add a fourth question: how is such innovation entangled: socially, culturally, environmentally and politically (Levidow and Papaioannou 2017)?

Concerning the first question, there is a rich literature that has attempted to describe how innovation occurs in developing countries, set within a broader historical context largely focused on technology that extends at least back to the seminal work of Schumacher in the 1970s. Fressoli et al. (2014), for example, broadly compare the features of what they describe as mainstream science, technology and innovation with grassroots framings of innovation for development – we will return to this topic later in the book. This literature itself intersects with a broader literature focused on developed countries which points to more general situations in which resource constraints within organizations enable innovation by making do with what is at hand (Baker and Nelson 2005; Garud and Karnøe 2003).

The second question has been only partially explored (Altenburg 2009). From the extant literature emerges a plurality of goals, purposes and motivations, which we will explore in more detail as the book progresses. Innovation scholars in both emerging and developing countries have, for example, advocated concrete actions to set up functional innovation systems aimed at overcoming problems of underdevelopment and poverty (Arocena and Sutz 2000; Lundvall and Chaminade 2009; Martins Lastres and Cassiolato 2008; Muchie and Gammeltoft 2003). In stark contrast, others have argued that innovation can in fact be the very cause of inequality and social exclusion (Arocena and Senker 2003; Arocena and Sutz 2003; Cozzens 2007, Cozzens 2008; Cozzens and Kaplinsky 2009). Entrepreneurship and organization scholars publishing in the so-called BOP literature (Prahalad 2010) search for opportunities for companies that are interested in opening markets at the BOP through the development of good-enough and affordable products (London 2009; Prahalad and Mashelkar 2010), aiming to co-produce profits with social goods such as development. These scholars hypothesize that the BOP could be a source of breakthrough innovations (Prahalad 2012) and a huge potential market for multinational corporations (London and Hart 2004; London 2009). In contrast again, others have focused on grassroots movements that want to use innovation to explicitly promote community empowerment, social justice and environmental sustainability, issues which are perceived as being at least in part caused by a free-market ideology (Smith and Thomas 2014). This perspective calls for patterns of innovation and development that are appropriate for the poor in the Global South (Abrol 2005; Dagnino 2009; Gupta et al. 2003), echoing earlier debates around appropriate technology.

Finally, concerning the third question, there are increasing signals regarding the potential for a real impact of new innovation models emerging from the Global South. The National Health Service (NHS) in the UK, for instance, is already looking at Indian innovations in healthcare to provide affordable solutions (NHS 2013). Hart (2002; 2011) suggested that a new wave of "green disrupting innovations could flood the North, although there is little evidence to date to confirm this. Brown (2005) warns against the blow-back effects of Southern innovations on the North’s competitiveness, while Govindarajan and Trimble (2012) praise the advantages that reverse innovation" will bring to emergent economies such as India and China.

I.2. Innovation, development and post-development

Today, around five billion people live in the so-called developing world. The study of socio-technical change in those contexts is extremely important, not least to understand the future of a globalized economy that today more than ever connects every corner of the planet. In a world in which population is expected to increase steadily for at least the next 35 years, resource scarcity and insecurity are likely to become increasingly ubiquitous. In the face of these challenges, many scholars, politicians and activists have called for an acceleration of the process of inclusion of the underdeveloped into the club of industrialized nations, underpinned by competitive socio-technical systems in which innovation can flourish (Lundvall et al. 2009). Often accompanying these are calls for structural reforms at the institutional level: such as the liberalization of trade, labor markets and public services; all elements characteristic of what is known as the neoliberal agenda (Gershon 2011). The Global South has even been seen by some as the future El Dorado of innovation, or its holy grail, to use the words of Prahalad and Mashelkar (2010). As Kaplinsky (2011a) argues, There are very good reasons to assume that technical change originating in the South will become a major driver of innovation in the 21st century.

But what is this innovation and who is it for? And if this innovation intersects with development, we must also question what development is and who this is for. Development, and more recently the notion of development-oriented innovation, are concepts so vague that they can, and do, easily embody multiple meanings and politics. As Cornwall (2007) argues, innovation for development is an umbrella term that can be surrounded by many other buzzwords such as inclusion, self-help, empowerment, participation, cooperation, capability building, profitability, markets and sustainability. Buzzwords always have contested meanings and are interpretively flexible; they also shelter the interests and political agendas of those who promote and use them.

The initial hypothesis of this book is that the innovation discourse in the Global South has followed a very similar construction to the construction of the development discourse itself, as described by post-development scholars such as Arturo Escobar (2012) and Wolfgang Sachs (1992; 1990). This construction created the fiction that those non-Western countries that did not present the signs of an incipient modernity were underdeveloped or not developed at all. And of course, in order to develop, the underdeveloped had to invest: first, in science and technology and now in innovation and the associated industrial and technical infrastructures and competencies necessary to foster and promote. Advocating a free market ideology and the establishment of functioning innovation systems, often tempered by the principle of inclusion, would require a re-engineering, or even abandonment, of indigenous cultural peculiarities that fail to fit with this new world order. However, as we will go on to explain in the following chapters, this post-modernist, post-development critique of innovation for development has to accommodate the more complex, nuanced and pluralistic situation that we find on the ground. But we can suffice to say at this point that innovation has been welcomed into the circle of development buzzwords, often with both arms open.

I.3. A discourse in the making

The main objective of this book is to show how narratives of innovation are being constructed within the wider discourse of development. If, as we argue, innovation has entered the lexicon of development and harbors multiple meanings and political agendas, these are meanings and politics that we suggest need to be made visible. Not only this, but we also need to better understand the implications and impacts that this emerging discourse in the making is having on practices on the ground and the lives of those targeted by development itself. Innovation for development is an emerging discourse that is far from passive: it has the constitutive power to shape and construct the reality of concrete practices in favor